Fitch‟s Russian rating revision and expectations of the Greek referendum‟s results will drive today‟s market mood. We await flat trading with low volatility.


We agree with Mr. Siluanov and also do not expect Fitch to downgrade Russia’s rating on Friday. This rating affirmation at the investment grade level may support Russian sovereign bond prices.

Russian Finance Minister Anton Siluanov told journalists on Thursday that he did not expect Russia’s sovereign credit rating to be changed by Fitch at an upcoming review on Friday.

Current macro statistics affirm the relatively strong economic situation in Romania, which in our view may provide stable demand for the country’s bonds.

Moody’s has positively assessed Romania’s reduced fiscal deficits and improved economic growth, although its high sovereign external debt burden and the risk of a slowdown in regional trade pose challenges. The agency expects an average growth rate of around 3% in the next few years for Romania. In addition, fiscal reforms have helped Romania bring down its fiscal deficit to 1.5% of GDP in 2014, compared with 8.9% in 2009. Moody’s expects that Romania’s government debt ratios will likely plateau at around 40% of GDP over the next two years, given the likelihood of continued expenditure contraction and despite recently-unveiled tax cuts.


Tsesnabank’s rating affirmation supports our Kazakh Engineering recommendation, given one of the main risks for the company is related to the bank, as the majority of its cash is deposited there.

Standard & Poor’s has affirmed Tsesnabank’s credit rating at B+ with a stable outlook due to the bank‟s solid market position in Central and Northern Kazakhstan, loan portfolio quality, stable deposit-based funding profile and profitability, which is superior to the system average. S&P views Tsesnabank‟s systemic importance in Kazakhstan as “moderate”; it is the third-largest bank in the country with a 7.4% market share by assets as of May 1, 2015.

The situation around Uralsib bank has increased risks for the Russian banking system, given the bank’s size and funds needed for it support.

S&P lowered its rating on BANK URALSIB to ‘B’ from ‘B+ and placed them on CreditWatch with negative implications due to its weak financial results, which negatively impact capital ratios and bank profitability, which in turn limits the bank‟s ability to absorb losses amid the economic recession in Russia.


Emerging markets funds reported mixed statistics for the previous week. Hard currency and local currency funds posted an outflow of USD 200 mln and USD 250 mln, respectively, while blended currency funds reported an inflow of USD USD 200 mln.

Vladimir Malinovsky

Schildershoven Finance

Schildershoven daily in TRDATA

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